News Analysis: Companion Exemption — At What Cost?

In 2011 the Obama administration proposed that the Department of Labor abolish the companionship exemption, which excludes home care workers from minimum wage and overtime protections because they’ve been deemed to be companions for people with disabilities instead of caregivers.

The federal change, under review by the Office of Management, would provide wage protections to over 2 million in-home care workers by clarifying the difference between a companion and a personal attendant. According to the DOL, companions would perform duties consistent with companion roles, but personal care tasks would not be able to exceed 20 percent of total weekly hours worked. Companions could no longer perform medical tasks that typically require training but still would not need to be paid overtime wages.

The push for expanded wage protections began years ago when Long Island caregiver Evelyn Coke sued her employer for back overtime pay. In June 2007, the U.S. Supreme Court ruled that because of the companionship exemption under the Fair Labor Standards Act, Coke’s employer had done nothing wrong. However, the high court said the DOL could reinterpret the exemption.

Labor advocates herald the proposal as a way to improve working conditions for home care workers and attract people into the fast growing profession. However, many in the disability community fear the estimated $100 million yearly cost of the rule change will impact their care by cutting caregiver pay. They want to see Medicaid rates raised to cover the additional expense.

California resident and quadriplegic Nancy Becker Kennedy receives 269 hours a month in attendant care. She tries to give her caregivers as many hours as she can but says she fears she’ll be forced to cap caregiver hours and hire more help.

Becker Kennedy, a member of the Los Angeles County Public Authority Board that oversees in-home care for 200,000 people, says many caregivers in California are family members who could be hard hit under the proposal. For example, a person who receives the maximum 280 monthly care hours at $10 an hour would pay their family caregiver $2800 per month. However, if the exemption were lifted and the family member’s hours were capped at 40 per week, pay would drop to $1600 per month. Becker Kennedy sees widespread misery for families if the exemption is eliminated. “Nobody here wants to see their hours cut if they want to work more hours,” she says. “People can work as little or as much as they want now.” She wants the choice of working extra hours to remain in the hands of caregivers.

States like California have recently made significant cuts to their in-home care programs. Becker Kennedy can’t envision any kind of Medicaid increase that would pick up the expense of overtime for caregivers. “Where is the pot of gold?” she asks.

Steven Edelstein, national policy director for the Paraprofessional Healthcare Institute, says the home care industry has outgrown the companionship exemption. “The exemption was never meant to cover professional caregivers who were doing it as a livelihood,” he says.

Edelstein says he understands consumer’s concerns, but adds, “From what we see, it hasn’t been a barrier to people getting the home and community-based services they need [in states with wage protections].” He adds that nothing in the proposal restricts people from hiring whom they want but admits there has to be a change in Medicaid funding if people will be able to continue to receive the level of care they want. “Under the Medicaid program there has to be either accommodations for overtime pay or there has to be a means for accessing additional service providers so it doesn’t require overtime,” he says.

Many disability advocates feel the proposal to remove the companionship exemption is being forced on them. In a letter to the OMB this spring, the National Council on Disability urged more time for additional research and negotiation so a fair balance between the needs of both the service providers and the disability and aging communities can be reached. Advocates say the DOL must involve the disability community if they want to find a solution that will not only satisfy all parties but ensure maximum independence for the consumer in choosing who they want to care for them.